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The Insurance Regulatory and Development Authority of India (Irdai) has said all insurers from the life, non-life and health segments operating for 10 years should have at least five per cent of their total policies from the social sector.
Social sector includes the unorganised sector, informal sector and economically vulnerable or backward classes both in rural and urban areas. In the first year of operations, insurers should ensure 0.5 per cent coverage from this segment. In its guidelines on rural and social sector obligations, Irdai said every insurer should mandatorily do business in these segments.
For the rural sector - the places or areas classified as rural in the Census - life insurers have to write at least seven per cent of total number of policies from these areas in the first year of operation. This goes up to 20 per cent from the 10th year onwards.
For general insurers, two per cent of gross premium income should be in the rural segment in the first year, which goes up to seven per cent from the ninth year onwards. In respect of stand-alone health insurers, it is 50 per cent of the obligations prescribed for non-life insurers.
The regulator said micro insurance policies issued are eligible to be reckoned for social-sector obligations. Where a micro insurance policy is issued in a rural area, it can be reckoned for both rural and social sector obligations separately.
